Guten Morgen! [Applause.] General [Hans Peter von Kirchbach; Chief of Staff], thank you for admonishing me in the beginning to give a very short speech.

Minister [Rudolf] Scharping noted in his very comprehensive and brilliant presentation this morning the enduring bonds between our nations. I think that he is the embodiment in his lifelong friendship with the United States of that bond that we share. Rudolf, as Minister-President of Rhineland-Pfalz, the state where most of the American forces in Germany are established, you stood with and supported our forces and their families. Now as Minister of Defense, as we heard again today, yours has been a very strong voice for a new Bundeswehr, ready and equipped to play a leading role in a new NATO ready to meet the new challenges of the 21st Century.

It has been my privilege to serve along side you, especially during the very difficult moments in Kosovo. It is my pleasure to join you here today as one of the few, if not the first, foreign defense leader ever to address this conference. Let me thank you again for your great friendship. [Applause.]

General von Kirchbach, officers of the Bundeswehr, distinguished guests, ladies and gentlemen.

To follow Minister Scharping in this fashion calls to my mind the story of the United States Senator who once spoke at a dinner following the famous American humorist Mark Twain. Twain spoke first and he delivered a speech which was very warmly received. When his turn arrived to speak, the Senator said, "earlier today Mr. Twain and I reached a pact. We agreed to trade speeches. He has just delivered mine and I am delighted that you have so warmly received it. [Laughter.] I regret that I have lost his speech and I cannot remember anything that was in it." [Laughter.]

Well, let me say that I feel very much like that Senator following Mark Twain this morning. I do have a fairly lengthy paper that has been prepared for distribution. It touches on many of the same points that Minister Scharping has just raised and so I indeed will try to speak quite briefly to you this morning.

The glittering ceremonies and celebrations of recent weeks across this nation and across the world, I think have served as shining reminders of the awe-inspiring events here in Europe ten years ago, but also how these seismic shifts in world affairs have shaped our world today.

Ten years ago, NATO faced one central mission, defending its borders against Soviet tanks and troops that stood a mere thirty miles from here. Today in a new NATO, with three new members who used to be old adversaries, we face many missions: preventing and managing the threats beyond [our] borders; rogue regimes; rekindled nationalists and ethnic hatreds; ruthless terrorists and the reckless proliferation of weapons of mass destruction.

Although they are different and more diverse than the threat of a massive Soviet attack, these threats are no less dangerous to our society, to our prosperity and potentially to our freedom, and so NATO’s mission, the security and defense of its members, remains unchanged. But the challenges to that mission are different and our alliance must adapt to meet them.

Ten years ago, a divided Germany was still in many ways a hostage to history. Today a new, united Germany has regained the reins of its destiny and is writing a new history of leadership in Europe reaching out to neighbors so that, as Minister Scharping has said, for the first time in history, Germany is surrounded by friends and partners.

Indeed, in recent years, Germany has proven that the past need not bind a people and their leaders in perpetuity. Germany, the Bundeswehr, has embraced missions the world over, from Cambodia to Somalia and today even in East Timor. When ethnic animosities were stoked until they ignited in all of Bosnia, Germany responded; supporting airlifts to the Bosinian people, sending your soldiers to keep the peace.

When another wave of terror threatened to purge Kosovo of its people, again Germany responded. With the leadership of Chancellor [Gerhard] Schroeder and Ministers [Joschka] Fischer and Scharping, and the strong support in the Bundestag from the political parties all across the spectrum, Germany responded by leading the search for a diplomatic option; and when force became the only option, by sending your Tornado pilots into combat for the first time in Alliance history, by sending your sailors to the Mediterranean and the Adriatic, by sending your soldiers, who serve today in Kosovo, now under the leadership of General [Klaus] Reinhardt who is here today. Ladies and gentleman, you have made history and every one of you should be deeply proud of what you have accomplished.

In the coming years the United States and our allies are going to look to you. We are going to look to Germany as a leader in the Alliance, as a leader in European security and as a leader in Allied military capabilities.

If the past is prologue, then I think events in the Balkans will not be the last challenge to our common interests and values. Quite to the contrary, I believe that Bosnia and Kosovo remind us that future missions to protect European security will likely require our countries to move forces rapidly, to sustain them outside our national territories without pre-existing communications, logistics, headquarters or other infrastructure and to equip them with modern technology that will enable them to be highly effective, and indeed very precise, in combat.

Bosnia and Kosovo also remind us that we cannot afford the disparity of Alliance capabilities that we witnessed this spring, and I would like to be very clear on this point. There was no disparity in courage or will. Allied planes endured the same air defenses, and faced the same risks, as American pilots and crews. But the disparity in capabilities, if not corrected, could in fact threaten the unity of this Alliance. A great Alliance cannot have only one member, the United States, conducting virtually two-thirds of all the support sorties and half of all the combat missions. A great Alliance cannot have only one or a few countries with precision-guided munitions that can operate in all weather. A great Alliance cannot have pilots communicating on unsecure lines open to its adversaries. A great Alliance cannot afford extended delays in deploying its forces to potential flashpoints.

Clausewitz once remarked, "In war more than anything else, things happen differently from what we expected." By this measure, our ability to meet the unexpected, NATO’s transformation from a territorial defense to a more flexible, deployable force, is still incomplete. NATO’s Defense Capabilities Initiative, which Minister Scharping touched upon this morning, was launched at the Washington Summit. It will complete this transformation by focusing on several key areas. We need forces that are more mobile. We need forces that sustain themselves longer, forces with more secure and effective command and control, forces that can engage effectively across a full range of missions, forces that can survive better against new types of challenges.

Critical to an even stronger, more capable NATO is an even stronger and more capable Europe. That is why the United States is prepared to, and does, in fact, support the development of the ESDI, the European Security and Defense Identity, within NATO. As Minister Scharping has said, the problem is not too much America in NATO, but too little Europe.

Operation Allied Force held up a very bright light to both the strengths and the shortfalls of NATO members and the United States was no exception. American mobility assets, the transport aircraft and the refueling tankers, were crucial and yet we might have experienced significant shortfalls had we been forced to deploy ground forces as the KFOR deployment has begun to reveal.

Our precision munitions allowed for effective surgical engagement, but even we had fewer stocks than we would have liked to have had on hand. Likewise, our search and reconnaissance assets were critical to the success of those precision munitions, but these were in relatively short supply as well.

Just as there are capabilities that the United States and other allies must enhance, so are there those that the German military must continue to address. Specifically, the Alliance looks to German leadership, leadership that is in Germany’s own interest, on specific improvements in the areas of the Defense Capability Initiative.

Germany has already shown leadership on enhancing mobility. Indeed, the European mobility initiative proposed by Minster Scharping last spring is now taking life and we look forward to further development. In addition, the commercial sectors, air and sealift, holds great promise if Germany and other allies establish appropriate means to use them, not only in traditional NATO territorial defense but in crisis responses as well.

Germany has also taken steps to improve command and control and Minister Scharping’s commitment to reorganizing and streamlining the command and control structures again, is a move in the right direction. At the same time, Germany still has a number of programs to carry out to fulfill previous NATO planning commitments.

With respect to sustaining forces and operations, Minister Scharping’s planned increase in the Army’s Crisis Reaction Force, mostly of support units, again is very encouraging. But I would also note another way to leverage Germany’s capabilities. The Luftwaffe, which has some of the world’s most capable pilots and air crews, should be afforded the aerial refueling capability which they lacked in Kosovo.

With respect to engaging effectively in a range of missions, we welcome Germany’s programs to further develop precision munitions, but note that all allies need to commit further resources if we are going to benefit from these critical capabilities in the future.

To ensure that our forces survive in battle in hostile environments, we particularly welcome the outstanding leadership you have displayed in the crucial area of theater missile defense.

However, I must stress that Germany’s strong leadership in enhancing these capabilities demands leadership in another critical area: devoting the resources and making the investments necessary to field a 21st Century force.

I think everyone in this room would understand that the devoting of resources, defense budgets, are always going to be a function of national priorities. Every one of us who have ever served in a legislature understands that we have to set priorities. For Germany, the task of unification has been an enormous, a truly enormous, undertaking and the task of now consolidating the common European currency on a sound basis continues to be crucial for long-term economic stability.

But just as defense budgets are a function of national priorities, they also must be a function of international challenges that we face and the capabilities we need as an alliance. We particularly commend Minister Scharping for speaking out so strongly for the critical funding needed to field the Bundeswehr of tomorrow.

I’d like to take just a couple of moments to recount some recent American history that perhaps is relevant. In an era of increasing deployments and operations, there are voices in America, and I suggest across the Alliance, that have begun to ask whether or not we are still committed to providing the necessary investments needed to ensure the readiness of our forces.

Today we have renewed our commitment with the largest sustained increase in defense spending in more than fifteen years. We believe that other allies can, and in time, will do likewise. Yet even today we cannot undercut Alliance capabilities with defense budgets that fail to provide minimum readiness and investments.

I will tell you that it is somewhat discouraging, as one who travels up to Capitol Hill to request the largest increase in nearly twenty years, to have members of Congress look across the Atlantic and say, "Yes, all of our allies are undergoing reformation of their militaries, but we are also witnessing dramatic reductions in their budgets which will translate into less capability rather than more."

So just as the Alliance looks to you to maintain sufficient defense spending, it looks to you also to realize the full potential of the resources that you already spend. Many mobility and sustainability and logistics capabilities can be met through commercially available assets and off-the shelf technology that Minister Scharping referred to this morning. Likewise, Minister Scharping’s efforts to streamline procurement and leverage the unique strengths of the German industrial sector, I think they give great hope for reforms that can make the most of German defense spending. However, the most critical procurement reform remains adequate funding. Germany’s budget shares for investment and particularly for procurement should rise substantially to strike the balance typical of other major allies.

As varied as they are, the success of all these reforms and restructuring that I have noticed so far rests on something else and that is leaders of imagination and dedication. Again, I would like to take this platform today to praise Minister Scharping. I think he has displayed great courage in an effort to build this new Bundeswehr. He knows that peering into the future, an opaque future, requires vision. So he has brought together the brightest minds in a commission on common security and the future to ask difficult questions, propose innovative solutions, and garner national support for the changes to come. There is no better time than the present for Germany to conduct such a strategic defense review.

Minister Scharping has called for a complete reorientation of the Bundeswehr. The significant increases in the size and capabilities of your Crisis Reaction Force that he has ordered will be substantial and will be a very welcome contribution to building a more deployable, flexible force.

I would like to add just a personal view, this is not any view of my government or others who serve in the government: truly complete reorientation of the Bundeswehr would involve even further, far more dramatic increases in the Crisis Reaction Force, perhaps doubling or even tripling its size. Indeed, even more than implementation of the Defense Capabilities Initiative, even more than all of the advances I have touched upon this morning, your ability to build a new, more agile Bundeswehr and to contribute to a new, more agile NATO, will rest in great measure on whether you substantially augment your Crisis Reaction Force.

At the same time, I think it is also worth noting that such forces, even if fewer in number, are still going to be more expensive, man for man, to maintain and train and equip to modern standards.

Well, you will ask the question, "Where do we get the resources? Show me the money!" In addition to making the wisest use of existing resources, further savings could be found I think by diverting resources from Cold War assets to 21st Century assets; for example, in a radical reduction and restructuring of an outmoded, oversized main defense force, in creative approaches to achieving necessary personnel reductions, and finally through the elimination of excess and obsolete bases and infrastructure that have been associated with Cold War-era standing forces.

We have been through four base closure rounds in the United States; we need two more. They are hard to achieve. Politically they are almost impossible to achieve. The fact is that you cannot continue to maintain an infrastructure that is no longer relevant to the new missions. We have to look for ways in which old and outmoded assets can be eliminated and the resources devoted to the kind of future that we need.

I believe that the decisions that Germany makes in the next few months and years are going to have a profound and lasting effect and impact on the capabilities, not only of this nation, but of the Alliance as a whole. Perhaps, now more than ever, the Alliance looks to German leadership to contribute to the capabilities necessary if we are going to continue shaping peace and security into the next century.

Ladies and gentlemen, for half a century, Germany and the United States, along with the NATO allies, have stood together in this long twilight struggle that President Kennedy talked about, to defend our common interests and values. For half a century, the people of Germany, more than any other in Europe, have borne a heavy burden of tanks and troops from across the Alliance. For half a century tens of millions of Americans in our forces and their families have come and they have served along side you, building deep and enduring friendships that form a foundation of our national partnership. I think that perhaps the greatest tribute to that half century of shared sacrifice and service can be found in that wall of concrete and razor wire that came tumbling down.

A decade removed from that astonishing break from the past, we have another historic opportunity to secure our future and we are reminded of Bismarck’s definition of political genius, "the ability to hear the distant hoof beats of history and then to grab the coat tails of that rider as he thunders by."

Today, we can hear the hoof beats of tomorrow, both of its promise and its peril. By building a new Bundeswehr, by building a new NATO, we can catch those coat tails before the challenges and changes of tomorrow's world come thundering by.